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Percentage-Centered Bonus Taxation: This means that your employer will consider your bonus payment as a different (or “supplemental”) earnings from your standard wages and immediately withhold the 22% bonus tax rate we stated higher than.
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As bonuses rely toward your annually money, it’s subjected to money tax guidelines; however, lots of come to feel like their bonus receives taxed larger than it really should. Well, how are bonuses taxed? Keep reading to learn the way tax guidelines utilize to the bonuses, and how you can lessen your tax liability.
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The inverse of the bonus payment, that may be when base salaries shrink on lousy general performance, this is known as a malus.
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